‘Slim chance of more IPOs for 2023’

By VG Cabuag @villygc

Daniel D. Camacho, FMiC ’s executive vice president and group head for investment banking, said the company is “looking forward to the comeback of iPos next year.”

“For the rest of 2023, i think the chances are slim. it ’s July already; Christmas is close. So you only have until November [to do the iPo],” Camacho said during the investment bank’s mid-year economic briefing.

So far, only two i P o s were launched this year—the P1.6-billion offering of Alternergy Holdings

Corp. and the P1.7-billion offering of Upson international Corp., the owner of several computer stores in the country.

Securities and Exchange Commission Director Vicente Graciano P. Felizmenio Jr. said, however, that the agency is expecting at least four iPos for the rest of the year. He also said most of these firms had decided to postpone their listing plans due to “choppy market conditions.” t hese include affordable housing developer o v ialand i nc. and

Enrique K. Razon Jr.’s Prime infrastructure inc.

“We expect that during the second half they will push through with their iPo plans. t hey are just preparing for the proper timing,” Felizmenio said.

Meanwhile, Cristina Ulang, FMiC ’s head of research, said the benchmark Philippine Stock Exchange index (PSEi) may close between 7,300 to 7,500 points by yearend, and record an earnings-pershare growth of 13 to 15 percent and a forward price to earnings (PE) ratio of 13.5 times to 14 times.

Ulang said these were almost the same targets they set for the PSEi at the start of the year, but they introduced a lower band of 7,300 points.

“because this is really a transition period very difficult to forecast a lot of moving parts, a lot of ifs a lot of whens,” she said. “So there’s there seems to be an insinuation on our part that we may not be able to return to the level of the long term

PE the historical average, which is 15 or 16 times.”

FMiC said, however, that there is “a promising landscape” in 2024 with the return of iPos and real estate investment trust, offering potential investment opportunities.

“ t he second half of the year presents a favorable buying opportunity and accumulating assets in preparation for a significant recovery towards yearend and the first quarter of the following year,” it said. in terms of investing strategy, FMiC said it is advisable to prioritize companies with low leverage, demonstrating strong balance sheets, ample liquidity, and minimal debt.

Additionally, focusing on low volatility stocks that exhibit dividend growth, affordable valuation providing a margin of safety, and cyclical industries with high profitability, excellent return on equity, pricing power, and dominant market share would be beneficial, the bank said.